Investor Relations

PTTEP 13061/00-5251/2017  
                                                                               

Investor Relations

27 July 2017

President

The Stock Exchange of Thailand

93 Ratchadaphisek Road, Dindaeng

Bangkok 10400

Dear Sir,

Subject:           Establishment of PTTGL Investment Limited and Share Sale and Purchase Agreement signed with respect to the acquisition of interest in PETRONAS LNG 9 Sdn Bhd (PL9SB) in Malaysia

Attachment:    Information Memorandum in relation to the Connected Transactions of PTT Exploration and Production Public Company Limited

PTT Exploration and Production Public Company Limited (PTTEP) would like to inform that on 25 July 2017, PTT Global LNG Company Limited (PTTGL) (a subsidiary of PTTEP which is a 50:50 joint venture company between PTTEP and PTT Public Company Limited (PTT)) established PTTGL Investment Limited (PTTGLI). In addition, on 27 July 2017, PTTGLI has signed the Share Sale and Purchase Agreement (SSPA) with Petroliam Nasional Berhad (PETRONAS) to acquire 10% equity stakes in PL9SB, a subsidiary of PETRONAS. The total consideration of the acquisition is approximately USD 500 million of which PTTEP’s portion is approximately USD 250 million. Completion of the transaction is subject to customary closing conditions as prescribed in the SSPA with expected closing dates within September 2017.

With the entrance of PTTGLI, the share proportion in PL9SB shall stand at 80%, 10% and 10% owned respectively by PETRONAS, JXTG Nippon Oil & Energy Corporation (through its subsidiary, Nippon Oil Finance (Netherlands) B.V.) and PTTGLI. PL9SB owns the ninth LNG liquefaction train and other related associated facilities located in the PETRONAS LNG Complex in Bintulu, Sarawak with a production capacity of 3.6 million tonnes per annum of LNG. Commercial operations have commenced on 1 January 2017.

The acquisition of equity interest in PL9SB is part of PTTEP’s strategy to synergize with PTT in the integrated LNG value chain to meet the country’s growing energy demand.

The aforementioned USD 500 million acquisition cost will be funded by 40:60 debt and equity. The equity funding to PTTGLI will be jointly provided by PTT and PTTEP according to their respective shareholding interests while the debt funding to PTTGLI will be provided by both companies’ treasury centers, namely PTT Regional Treasury Center Pte. Ltd. (PTTRTC) and PTTEP Treasury Center Company Limited (PTTEP TC). PTTRTC’s lending to PTTGLI is classified as a connected transaction, under the transaction relating to the receipt of financial assistance, per the Notification of the Capital Market Supervisory Board No. Tor Chor 21/2008 Rules on Connected Transaction. The transaction value is more than 0.03% but less than 3% of the net tangible assets of PTTEP which is required by the rules that PTTEP must seek approval from the Board of Directors Meeting and notify the Stock Exchange of Thailand as disclosed in attachment. However, the transaction size does not require disclosure under the rules, procedures and disclosure of information concerning the acquisition and disposition of assets of listed companies.

 

 

Sincerely yours,

 

 

Somporn Vongvuthipornchai

President and Chief Executive Officer